LIQUID ASSETS: Thousands of bearer bonds — which could be worth as much as $70 billion — are now in danger of turning to pulp after Hurricane Sandy flooded the downtown vault that had been storing them. Photo: Bloomberg

It’s the biggest mystery on Wall Street.

Hurricane Sandy floodwaters inundated a 10,000-square-foot underground vault downtown, soaking 1.3 million bond and stock certificates — including bearer bonds that function like cash — and putting them in danger of turning to mush.

A contractor working for the vault owner, the Depository Trust and Clearing Corp., is feverishly working to restore the paper.

But the value of the threatened notes under 55 Water St. remains unknown to all but the innermost circle of Wall Street bankers.

One source said $70 billion in bearer bonds were in jeopardy.

DTCC — a depository controlled by the biggest financial firms on Wall Street — won’t say exactly what was in its vaults, how much the notes are worth, and who owns what.

Most of its member firms, including Deutsche Bank, JP Morgan Chase, Bank of America, UBS and Citi did not return calls.

The exception was Goldman Sachs, whose spokesman Michael DuVally confirmed Friday to The Post that his firm stored bearer bonds in the DTCC vaults. He acknowledged they would be nearly impossible to redeem if destroyed.

Yesterday morning, DuVally elaborated, and said the value of the Goldman bonds was “less than $1 million.” An hour later, he called back to say, “The market value of bearer bonds potentially impacted is less than $10,000.”

DTCC spokeswoman Judy Inosanto would say only that “a variety of equities and bonds” were damaged. “I can’t go into details. We do not provide values for security reasons.”

Even a contractor who bid on the cleanup and recovery job — the notes were drenched in diesel- and sewage-tinged water that filled 55 Water Street’s three sub-basements — clammed up when asked about the damage.

“It’s nobody’s business,” he said. “The public doesn’t need to know what’s in that vault. It’s between them and their customers.”

What is known is that for decades the vault housed millions of bearer bonds — worth many times that amount in dollars. In 1990, two-thirds of the 32 million notes in the vault were bearer bonds, DTCC records showed. Even as bearer bonds matured and the notes were removed, the vault continued to hold 5.4 million bearer bonds at late as 2003.

Experts say the only hope for saving the stacks of bonds would be to freeze-dry them in a cold vacuum chamber. As the air pressure in the chamber is reduced, and heat is increased, moisture in the documents would evaporate.

Security would have to oversee a tight chain of custody during the procedure, and the entire process could cost upward of $2 million.

Belfor, a Texas-based recovery firm rumored to have won the job, had a trailer parked outside 55 Water St. yesterday. When asked about a contract with Goldman to recover $70 billion in bearer bonds, Belfor spokeswoman Alex Gort said, “We have very strict confidentiality.”

Belfor workers at the site yesterday described a “complete restoration job” under “very high security,” but claimed to know nothing about the bonds.

“There are three vaults,” a hardhat said outside the building. “I wasn’t in the vault where the bonds are. Security is very tight down there. I know they were all under water. Billions of dollars’ worth, soaked. I know they are trying to pack them up.”

Bearer bonds are paper certificates, usually issued by governments, that are redeemable after a prescribed term. The bearer submits an attached coupon to receive payment. Because they are typically unregistered and can be used like cash, they were commonly used by those wishing to hide, and not pay taxes on, assets. They were banned in 1982.

But those that haven’t been fully redeemed remain in circulation.

Andrew Kintzinger, a securities lawyer, said that if a Wall Street firm were holding bonds as a custodian for investors, there would be electronic records documenting payments that would provide investors with proof of ownership.

But if Goldman or the other banks owned the damaged bonds themselves, redeeming them could be “a problem,” he said.